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Professional indemnity insurance and private building certification update

Monday, 8 July 2019

In a win for Queensland councils, the risks, costs and workload for building certification will not be shifted onto local governments and steps have been taken to protect the private building certification industry in Queensland.

In recent years, the professional indemnity (PI) insurance market has been significantly tightened in response to the fire safety risk of buildings and combustible cladding and it has become increasingly difficult for private building certifiers to obtain exclusion-free PI insurance.

The State Government announced its official response to the combustible cladding issue on 3 July 2019, which includes:

  • introducing of ban on combustible cladding, including all aluminium composite panels with a PE core of greater than 30 per cent 
  • proposed new laws to allow licensed Queensland certifiers to hold PI insurance with cladding-related exclusions, and 
  • calling on the Commonwealth Government for a longer-term national approach. 

The decision followed two extraordinary meetings of the Ministerial Construction Council (MCC), convened by the Minister for Housing and Public Works, the Honourable Mick de Brenni MP.

One of the options put forward to the MCC for consideration was to 'promote awareness of the regulatory environment, including local government’s certifying role' under section 51 of the Building Act 1975, where a local government is required to be the provider of ‘last resort’ for ‘building certifying functions’ in certain circumstances. 

The LGAQ, in discussions with the State Government, highlighted the limited capacity of local governments to provide building certification services in Queensland and expressed significant concerns with any option that shifted/increased the risks, costs and workload onto Queensland councils. Although some local governments have an operative in-house building certification unit, many councils have not maintained this since the introduction of private building certification in 1998. 

The LGAQ will continue working with the State Government regarding the scope and timing of the proposed new laws and next steps to minimise any potential impacts on Queensland councils.

Local Government Association of Queensland
LG House, 25 Evelyn Street, Newstead Qld 4006


 

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